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Ha v New South Wales

Ha v New South Wales

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HIGH COURT OF AUSTRALIA

BRENNAN CJ, DAWSON, TOOHEY, GAUDRON, McHUGH, GUMMOW AND KIRBY JJ

NGO NGO HA AND ANOR v STATE OF NEW SOUTH WALES & ORS (Matter No S 45 of 1996); WALTER HAMMOND & ASSOCIATES PTY LIMITED v STATE OF NEW SOUTH WALES & ORS (Matter No S 165 of 1996)
Constitutional law

(1997) 146 ALR 355

5 August 1997
Constitutional law

Constitutional law—Duties of excise—Exclusive power of Commonwealth Parliament—New South Wales law imposing monthly licence fees on retail and wholesale sale of tobacco—Fees calculated upon value of tobacco sold in earlier monthly period—Assessments issued in respect of unpaid licence fees—Whether fees or amounts payable duties of excise—Whether duties of excise are confined to taxes which fall selectively on locally produced and manufactured goods—Whether fees or amounts payable merely fees for licences to carry on business. Constitutional law—Judicial power—Prospective overruling. Constitution of the Commonwealth, s 90. Business Franchise Licences (Tobacco) Act 1987 (NSW).

Orders

Order:

The questions reserved are answered as follows:

1. In the first matter -

"Q (1) Whether, on the facts referred to above, the provisions of ss 36(1), 41(1), 41(3), 43, 45 and 47(1) of the Business Franchise Licences (Tobacco) Act 1987 (NSW) are invalid as imposing a duty or duties of excise within the meaning of s 90 of the Constitution."

A (1) Yes.

"Q (2) Whether, on the facts referred to above, the provisions of s 30(1) of the Act in so far as they apply to a retailer's licence are invalid in that the fee for a retailer's licence provided for by s 41(1) of the Act is a duty of excise within the meaning of s 90 of the Constitution."

A (2) Yes.

"Q (3) By whom should the costs of these questions reserved be paid?"

A (3) The defendants pay the plaintiffs' costs.

2. In the second matter -

"Q. Whether, on the facts referred to above, the provisions of ss 28-30, 34, 36-41 and 45-48 of the Business Franchise Licences (Tobacco) Act 1987 (NSW) or any of them are invalid as imposing a duty or duties of excise within the meaning of s 90 of the Constitution."

A. All of the sections referred to in the question are invalid.

3. In the second matter the defendants pay the plaintiff's costs of the question reserved.

Decision

BRENNAN CJ, McHUGH, GUMMOW AND KIRBY JJ.

Each of the plaintiffs in the first action conducted a duty free store in suburban Sydney in 1994. In the course of carrying on their respective businesses they sold by retail tobacco products to members of the public. Neither of these plaintiffs held a retailer's licence under the Business Franchise Licences (Tobacco) Act 1987 (NSW) ("the Act") at any material time. The plaintiff in the second action carried on the business of selling tobacco for resale in New South Wales in 1996. It appears to have held a wholesaler's licence at the relevant time. The second defendant in each action is the Chief Commissioner for Business…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1997] HCA 34
Decision Date: 5 August 1997

CaseChat Overview and Summary

In *Ha v New South Wales*, the High Court of Australia considered the validity of certain provisions of the *Business Franchise Licences (Tobacco) Act 1987* (NSW). The plaintiffs, tobacco retailers and wholesalers, challenged the monthly licence fees imposed by the Act, which were calculated based on the value of tobacco sold in a preceding month. The central dispute concerned whether these fees constituted duties of excise within the meaning of section 90 of the Commonwealth Constitution, which grants the Commonwealth Parliament exclusive power to impose such duties.

The High Court was required to determine whether the licence fees imposed by the New South Wales Act were duties of excise, thereby infringing upon the exclusive federal power under section 90 of the Constitution. Specifically, the Court had to consider whether the characterisation of the fees as payment for a licence to carry on business was determinative, or if their calculation and incidence meant they fell within the constitutional prohibition. The Court also considered the question of prospective overruling in relation to these constitutional issues.

The Court reasoned that a tax on the sale of goods, calculated by reference to the value of those goods, is a duty of excise, regardless of whether it is labelled a licence fee or whether it is imposed on the producer, manufacturer, or a subsequent seller in the distribution chain. The Court held that the fees imposed by the New South Wales Act were indeed duties of excise because they were levied on the sale of tobacco and their amount was directly related to the value of the tobacco sold. This was found to be an impermissible intrusion into the exclusive legislative power of the Commonwealth Parliament under section 90 of the Constitution.

Consequently, the High Court declared the relevant provisions of the *Business Franchise Licences (Tobacco) Act 1987* (NSW) invalid as they imposed duties of excise. The defendants, the State of New South Wales, were ordered to pay the plaintiffs' costs.

Orders

Orders of the court

1. In the first matter -

"Q (1) Whether, on the facts referred to above, the provisions of ss 36(1), 41(1), 41(3), 43, 45 and 47(1) of the Business Franchise Licences (Tobacco) Act 1987 (NSW) are invalid as imposing a duty or duties of excise within the meaning of s 90 of the Constitution."

A (1) Yes.

"Q (2) Whether, on the facts referred to above, the provisions of s 30(1) of the Act in so far as they apply to a retailer's licence are invalid in that the fee for a retailer's licence provided for by s 41(1) of the Act is a duty of excise within the meaning of s 90 of the Constitution."

A (2) Yes.

"Q (3) By whom should the costs of these questions reserved be paid?"

A (3) The defendants pay the plaintiffs' costs.

2. In the second matter -

"Q. Whether, on the facts referred to above, the provisions of ss 28-30, 34, 36-41 and 45-48 of the Business Franchise Licences (Tobacco) Act 1987 (NSW) or any of them are invalid as imposing a duty or duties of excise within the meaning of s 90 of the Constitution."

A. All of the sections referred to in the question are invalid.

3. In the second matter the defendants pay the plaintiff's costs of the question reserved.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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